Whitepaperdearjohn erickson 2007

Copyright © 2007 Questar Organizational Insights Group
DEAR JOHN:
A NEW LOOK AT WHY EMPLOYEES LEAVE
Anna Erickson, Ph.D.
Sally Blecha, M.A.
As talent management professionals strive to balance the changing needs of baby boom
employees with evolving expectations of younger employees, talent retention has become
more complicated than ever. To retain top talent, competitive companies need to understand
what drives an employee’s decision to leave or stay with an organization.
Conventional wisdom has always been that employees leave supervisors, not companies.
However, newer studies are finding that conventional wisdom may be wrong. It’s NOT just the
boss anymore.
www.questaroig.com
White Paper

1
The mantra that “people don’t leave
companies, they leave managers” has
been repeated so often that many
believe it to be true.
The Issue
One quarter of all employees would leave their
current employer if offered a comparable job in
another company, according to a survey of
employed adults throughout the United States.
Workplace stability,
employee loyalty and
expectations for
retention have shifted
dramatically over the
past decade. No wonder
there are myriad articles in business magazines
about employee engagement and talent retention.
Meeting the changing and divergent expectations of
employees across generations has become a
growing concern for many employers today.
Employers fear the imminent “brain drain” that may
occur as their most seasoned employees prepare for
retirement. Meanwhile, loyalty among younger
workers seems especially hard to capture. In a
longitudinal study of younger baby boomers, the
Bureau of Labor statistics found that employees
hold an average of 10.2 jobs between the ages of 18
and 24. Across the board, average employee tenure
is decreasing. Employees today stay only about four
years, on average, before leaving their job for
another company. As one executive from a Fortune
100 Company put it, “We’ve worked so hard at
breaking the psychological contract with employees
… Now we wish we had it back.”
The issue of employee retention and turnover has
been studied extensively. There are several factors
that are thought to influence turnover in
organizations, and much
disagreement over just
how much each of them
contribute to it.
However, it is generally
agreed that the
immediate precursors of turnover are known as
“withdrawal cognitions.” These include having
thoughts of quitting, talking with friends or
coworkers about your intention to search for a new
job or your intention to quit. Research has shown
that turnover is more highly related to intention to
stay or leave a job than it is to job satisfaction or
organizational commitment. In other words, by the
time an employee starts to talk about leaving, it
may be too late – they are already halfway out the
door.
All of this means that it is important for companies
to identify exactly what drives that intent to leave.
The mantra that “people don’t leave companies,
they leave managers” has been repeated so often
that many believe it to be true. And in part, it is.
The Research
There is no doubt that the first-line supervisor is
central to employee engagement, commitment and
loyalty. Research has clearly demonstrated the
importance of the supervisor in mitigating the
relationship between workplace stress and
withdrawal behaviors (Brotheridge & Lee, 2005;
Ladebo, 2005; Harter, Schmidt, & Hayes, 2002; Lee

2
& Ashford, 1996). Based on this research, we
understand the influence of the manager on the
employee’s ability to deal with workplace pressures
and unfavorable work environment factors.
While acknowledging the importance of the
manager, we should not lose sight of other key
factors that impact an employee’s attitudes and
loyalty toward an employer. Many companies have
placed so much faith in the supervisor’s impact that
they neglect other organizational factors that might
impact performance, engagement, and retention.
By blaming the manager for lost talent, they miss
opportunities to make an impact at the enterprise
level.
The relationship between job satisfaction and
employee retention has been investigated for
decades. Research evidence supports the link
between job satisfaction and turnover, although this
relationship may be impacted by factors such as
rates of unemployment (Carsten & Spector 1987,
Tett & Meyer, 1993).
Employee engagement is more targeted than
employee satisfaction. It refers to the individual's
involvement and satisfaction with, as well as
enthusiasm for, work (Harter, Schmidt, & Hayes,
2002). Engagement typically includes such factors
as people doing what they do best, with people they
like, and with a strong sense of psychological
ownership for the outcomes of their work (Luthans
& Peterson, 2002). The construct of engagement is
practical in nature. The very foundation of
employee engagement is based on the concept of
predicting and improving employee performance
(Harter, Schmidt, & Hayes, 2002).
In a recent study based on client employee opinion
survey data, Questar examined how well both
employee satisfaction and employee engagement
predicted turnover. Although job satisfaction and
employee engagement were correlated, it appeared
that employee engagement was a better predictor
of intent to leave. Results of a regression analysis
indicated that engagement was roughly twice as
predictive of intent to leave as job satisfaction
alone. In essence, engagement is a much better
measure of employee commitment than more
general measures of satisfaction.
When identifying the key drivers of employee
turnover, intention to leave, and other employee
withdrawal behaviors (e.g., absence, tardiness,
loafing) within a single organization, the influence of
the direct supervisor often emerges because
organizational variables such as company image and
senior leadership are held constant. However,
looking at the relationship across organizations
highlights the importance of company-wide
characteristics on employee attitudes. For example,
Schneider, et al. (2003), demonstrated the impact of
organizational success on employee attitudes and
the reciprocal nature of this relationship. In a study
of employee attitudes with 35 companies over eight
years, Schneider demonstrated that organizational
success (as measured by Return on Assets and
Earnings per Share) was a key driver of overall job
satisfaction and employee engagement.
Based on client data, Questar has found that the
impact of senior leadership has started to outweigh
the impact of the immediate supervisor on both
employees’ feelings of engagement and their
intentions to remain with their companies. In fact,
during the course of collecting and analyzing
employee survey data for over 20 years, a visible
shift in employees’ perceptions of leadership at
various levels has been observed.

3
Co-Workers
Supervision
Quality/Customer Service
Performance Management
The Job
Senior Leadership
Company Image
Employee Value
Relative Importance
Twenty years ago, the supervisor was clearly in the
driver’s seat. S/he had the most influence on
employees’ job satisfaction and their intentions to
remain with the company. In surveys, employees
often sided with their supervisors, and laid the
blame for problems squarely on the shoulders of
mid-level managers like plant or department heads.
Senior leaders (directors, VPs, and C-level officers)
were often a “non-issue”; items dealing with
perceptions of top management frequently reported
high percentages of scores in the middle, implying
an “average” or “so-so” connotation. Senior
leadership was disconnected; employees rarely saw
them and in some cases weren’t even sure who they
were. They perceived minimal relationship between
this group and their daily work lives.
Gradually, however, findings began to change. On
every key driver analysis we conducted for clients to
determine what factors on the survey were most
important to employees, senior leadership began
outranking supervision as a driver of intention to
stay with – or leave – a company.
Initially, we thought the results were an anomaly –
one or two clients who were experiencing
something outside the norm. However, it soon
became apparent that their results had become the
norm. While the employee-supervisor relationship
cannot be ignored, it’s NOT just the boss anymore!
The Study
To test this theory, we conducted
a study utilizing a cross-section of
employed adults in the United
States, across industries and
companies. First we asked them
to complete a 44-item
engagement survey that included the item I would
remain with this company even if offered a
comparable job in another company. We then ran a
regression-based key driver analysis using that item
as our dependent variable. Our goal was to identify
which dimensions of engagement were most
important to employees’ decision to remain with
their company.
Our findings confirmed our theory. Senior
Leadership had a much greater effect on
employees’ decisions to remain than did
supervision. And Company Image (i.e., belief in
what the company does, pride in working for the
company) had an even greater impact, almost
equaling the effect of Employee Value (i.e., the
company showing via its policies, recognition, and
support that employees are important to its
success).
While the trend held for all groups, it was most
noticeable among younger workers – those under
the age of 35. For this group, supervision was the
least important reason influencing their decision to
leave a company, while the company’s image was
the most important consideration. The gap
between those two reasons was larger for this age
group than for the rest of the population. And this is
the age group that will need to fill the shoes of those
departing boomers.

4
Individual Contributors
Middle Managers
Exec
Team
Front Line Supervisors
/ Managers
Further analysis showed the influence of specific
items on intent to leave. Employees who were
highly likely to leave were most likely to also
respond negatively to items that dealt with the
company’s image and their perceived “fit” in the
organization:
› 85% had no pride in working for the company
› 79% didn’t see how their job related to
company goals
› 70% felt their personal values were not
aligned with company values
They were much less likely to be unhappy with their
supervisors:
› Only 55% felt unrecognized for good work
› Half said their supervisor didn’t understand
the work they did
› Fewer than half (45%) felt their supervisor
couldn’t manage people
Other studies have reported similar findings. For
example, one research organization, in looking at
cross-cultural variations in employee attitudes
across four large multi-national companies, found
that “top management is a more important
determinant of job satisfaction than
immediate supervision.” Similarly,
supervision did not make the top five
drivers of intent to remain in a widely -
cited survey of employed adults.
So while “conventional wisdom” may state
that issues closer to the employee –
supervision, working conditions, pay and
benefits – have the greatest impact on whether
someone stayed or left an organization, it
appears that today the decision hinges on
broader issues: Do I believe in this company?
It is a good fit for me, value-wise and job-wise? Can I
make a difference in its success?
So what’s going on here?
Perhaps the fallout from the Enron scandal et al
awakened employees to the fact that the actions of
senior management do affect them – more directly
than they originally thought. The rise in importance
of senior leadership may also reflect the emphasis
business has been placing in recent years on making
sure employees see and understand the “big
picture” and their role in the company’s success.
Employees’ work world has broadened. They now
take a more serious, analytical view of senior
leadership.
Just as the immediate supervisor needs to care
about employees, respect them, listen to them,
nurture them, and develop them – so must mid and
senior level management. The way senior managers
treat their people sets the tone for a management
style/culture that trickles downward. And the
sphere of influence goes wider as the level of
management goes higher.

5
A front-line supervisor has a direct impact primarily
on his/her direct reports and manager. There may
be some influence on peers, but it is generally
limited in scope. On the other hand, senior
leadership’s influence can be felt up, down and
across – on the Board, on their direct reports (who
tend to be other high-level managers), and on their
partners. They have a broad, indirect impact on
people they’ve never even met, from entry-level
workers to stockholders to analysts and even
leaders of other companies. Impressions of senior
leadership are inextricably linked to impressions of
the company. This is the group that “runs” things –
that makes the decisions and is quoted in the news.
And those decisions influence stock prices, company
culture, policies – everything comprising what the
company IS to employees.
What does this mean to companies
that hope to retain employees
during the looming labor shortage?
Perhaps there needs to be more focus on what
drives confidence in senior leaders. When we
examined this issue in more depth, we learned that
competence in managing the company was indeed
important, e.g., setting the right direction, and
keeping the enterprise financially sound and
competitive. However, more important were
employees’ perceptions of the “human” factor: Did
senior leadership value employees? Did they treat
people with respect, support work-life balance, and
ask for employees’ opinions? Not surprisingly,
ethics and integrity were also critical.
The increasing importance of company image and a
highly visible senior leadership coincides with recent
social psychologists’ predictions. One theory says
that people today identify more strongly with their
jobs than ever before. This may be due to the
increasing number of hours worked, or the
decreasing number of hours spent in family or social
settings. Some psychologists predict that people
will increasingly be defined by “what they do” (at
work).
People want to be proud of the company they work
for – to be associated with a company that makes
others say “Wow, you work there?” Senior
leadership is intrinsically tied to that image. When
the “wow” factor begins to fade, even a great
relationship with his or her supervisor may not be
enough to overturn an employee’s intent to leave.
Organizations are constantly changing; an individual
supervisor is not a constant. In some companies,
supervisors come and go frequently. They may be
transferred or promoted into other jobs in other
areas. Some enterprises deliberately cycle
supervisors every year or two, to enhance their
familiarity with all aspects of a company as part of
their being groomed for higher positions. On the
other side, there are many employees who look
upon the idea of changing jobs within an
organization as a solid career move, enabling them
to acquire new skills and experiences that will
benefit them in the future.
These not uncommon situations, then, raise the
questions: In a company with frequent
management turnover, is it logical to assume that
someone will leave solely because of a “possibly
temporary” bad supervisor? If an employee truly
likes the company but doesn’t like the supervisor,
isn’t it more likely that he or she will look to transfer
within the company (assuming that is an option)
rather than leave?

6
And what if the supervisor really is the problem?
According to the “people leave managers” theory,
his or her area should be experiencing a high level of
turnover. And if people keep leaving a “bad”
supervisor by leaving the company, and the
company (as represented by upper management)
does nothing to intervene with that supervisor, isn’t
that an indictment of the company’s decisions? So
aren’t employees really leaving because of poor
company management?
It may be true that people don’t leave companies,
they leave managers – but we can’t assume that the
manager they leave is always the immediate
supervisor. It may be managers at other levels who
have instilled a culture that the employee can’t live
with.
The term “manager” extends beyond the immediate
supervisor. Organizations that place too much
emphasis on the immediate supervisory relationship
while ignoring other critical organizational factors
may find themselves at a disadvantage when
competing for employees in the years ahead.
Making a Difference
So where do we go from here? What can
organizations and leadership teams do to improve
their ability to retain key talent? Here are our
suggestions based on more than 20 years
experience with best in class employers. Although
many of these are commonly known, too often they
fall short in practice.
Know where you stand. It’s important to conduct a
thorough analysis of your organization’s climate to
understand the motivators and frustrations of your
employee base. If you currently conduct an
employee opinion survey, make sure you’re tapping
into key elements of employee engagement,
including company image, impressions of senior
leadership, and alignment with organizational
values. To truly leverage an employee survey, your
analysis of survey results should include
identification of key drivers of retention unique to
your organization’s culture and challenges.
Let employees know they’re heard. We have seen
far too many leadership teams spend considerable
time and effort understanding and acting on
employee input only to have employees complain,
“Why do you keep asking our opinion when you
don’t care what we think?” Clearly, communication
is the key. Make sure you’re telling employees what
you’ve heard and what action you’ll be taking as a
result of their input.
Leverage your strengths. Once they complete an
analysis of employee survey data or other
assessment of organizational climate, companies
inevitably want to fix what’s wrong – and do so by
focusing solely on their weaknesses. Take time to
understand where you’re strong, what drives your
employees to perform, and what factors make your
most loyal employees loyal. Then dig in to
understand how these strengths can improve your
current processes, including selection, training and
retention programs.
Increase leadership presence. Employees
consistently trust what they know best. Leaders
who are physically present, available and open to
employees are more trusted than those who are
distant. Look for ways to increase leader visibility,
decision transparency, and communication
throughout the organization.

7
Examine your talent management processes.
Most organizations understand that employees who
feel valued are more likely to stay. Make sure that
your talent management processes, including career
development and identification of high potentials, is
working well for employees at every stage in the
employee lifecycle. What do you have in place for
your newest employees? How about your seasoned
professionals? Keep employees challenged and
growing is imperative to retaining talent.
Live what you profess. Yeah, yeah, yeah – you
know – walk the talk and all that stuff.
Unfortunately we frequently see far too many
disconnects between company mission, vision and
values and leadership day-to-day behavior. No
wonder so many employees are cynical. One highly
successful company professes the following values
on its web-site: Respect, Integrity, Communication,
and Excellence. Sound familiar? How close are
these to your own organization’s stated values?
Would you be surprised to learn that these are the
stated values of a company currently under
investigation for fraud? You’ve heard it over and
over again, but it bears repeating: Are you truly
living your company’s values?
Manage your employment brand. How much does
your company spend on advertising? And how
much on internal corporate communications? While
it may be easier to quantify advertising
effectiveness in terms of sales, don’t underestimate
the impact of your company’s image within the
employee base. Resources spent on internal
communications are never wasted.
Measure for continuous progress. One thing we
know about change – it’s most likely to be sustained
if we gauge our progress, celebrate successes, and
build in adjustments to our plotted course. In
addition to your employee opinion survey (which
should happen at least one per year), pulse surveys
can help you understand where you’re making
progress, where you’re losing ground, and where
you need to adjust your strategy.
Conclusion
In today’s competitive, knowledge-based economy,
a strong talent base is often the single most
important factor shaping organizational success or
failure. And that talent is more at risk today than at
virtually any other time in history. Your best
employees have more employment choices and are
more willing to change employers than were their
predecessors. It’s time to look beyond the boss to a
more comprehensive model for employee retention.
If you don’t inspire your employees – somebody else
will.

ReferencesReferencesReferencesReferences
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March 30, 2005 from Sirota Survey Intelligence Knowledge Center White Paper database. Web site:
http://www.sirota.com/whitepapers/crossculturalvariations.pdf.
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Extension. International Journal of Stress Management, 12(3), 203-221.
Carsten, J., & Spector, P. (1987). Unemployment, Job satisfaction, and employee turnover: A meta-analytic test of
the Muchinski model. Journal of Applied Psychology, 72(3), 374-381.
Harter, J., Schmidt, F., Hayes, T. (2002). Business-Unit level relationship between employee satisfaction, employee
engagement, and business outcomes: A meta-analysis. Journal of Applied Psychology, 87(2), 268-279.
Ladebo, O. (2005). Relationship between Citizenship Behaviors and Tendencies to Withdraw among Nigerian
Agribusiness Employees. Swiss Journal of Psychology – Schweizerische Zeitschrift Fur Psychologie, 64(2), 125.
Lee, R., & Ashforth, B. (1996). A meta-analytic examination of the correlates of the three dimensions of job
burnout. Journal of Applied Psychology, 81(2), 123-133.
Luthans, F., & Peterson, S. J. (2002). Employee engagement and manager self-efficacy: Implications for managerial
effectiveness and development. The Journal of Management Development, 21, 376-387.
Schneider, B., White, S. S., & Paul, M. C. (1998). Linking service climate and customer perceptions of service
quality: Test of a causal model. Journal of Applied Psychology, 83, 150–163.
Tett, R., & Meyer, J. (1993). Job satisfaction, organizational commitment, turnover intention, and turnover: Path
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March 31, 2005 from KeyStone Search Web site: http://www.keystonesearch.com/newsletter_q1_2005a.htm.

About the Authors:
Anna Erickson, Ph.D., leads the Organizational Insights Consulting team at Questar. She
holds a Ph.D. in Industrial/Organizational Psychology and has more than 15 years
experience building effective organizations through people. She has worked internally at
Fortune 500 companies such as SBC Communications/AT&T and Best Buy Companies; she
has also served as a consultant to a wide variety of public and private sector organizations.
Sally Blecha, M.A., is a Senior Consultant at Questar. She has 25 years of survey research
experience as both an internal and external consultant. She also has an extensive
background in training and communications. Her client list includes multiple public and
private sector organizations representing the government and non-profit arenas as well as
financial, manufacturing, and business services industries.
About Questar Organizational Insights Group
Headquartered in the Minneapolis metro area, Questar Organizational Insights Group is
one of the nation’s preeminent research firms specializing in organizational research.
Established in 1985, we excel in the development of specialized instruments for accurate
and detailed measurement of employee engagement, leadership, and performance
improvement. Whether your organizational research challenge is domestic or global,
complex or straightforward, large or small, Questar/OIG can provide world-class solutions.
www.questaroig.com

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